British Panel Calls for Stricter Antitrust Rules on Tech Giants

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A new report said Britain needed stricter rules on acquisitions in the technology industry and stronger oversight to make sure that new rivals cannot be squashed.CreditCreditChris J Ratcliffe/Agence France-Presse — Getty Images

LONDON — The expanding power of technology companies has become a talking point in the United States presidential race, a subject of debate in India and a top focus of regulators in the European Union. Now, Britain is adding its voice to the worldwide backlash.

Big Tech is reducing consumer choice and harming innovation, according to a British government report released on Wednesday. The government, as a result, needs to overhaul its antitrust policies.

The 150-page report, ordered by the chancellor of the Exchequer, Philip Hammond, the country’s top treasury official, said the country needed stricter rules on acquisitions in the technology industry and stronger oversight to make sure that new rivals cannot be squashed.

“There isn’t sufficient competition today,” said Jason Furman, a professor of economic policy at Harvard who led the group behind the report and a former top economic adviser to President Barack Obama. Addressing that, he said, “is one of the most important economic policy questions” in the world today.

Last week, Senator Elizabeth Warren, Democrat of Massachusetts and a presidential candidate, called for breaking up the largest tech companies. Senator Amy Klobuchar, a Democrat of Minnesota who is also making a White House bid, has proposed taxes and antitrust laws against the industry.

Officials in the European Union have been particularly aggressive in pushing back against the industry, issuing billions of dollars in penalties against Amazon, Apple and Google for antitrust violations and tax avoidance, while passing strict privacy regulations. The European Union is weighing copyright regulations and rules to stop the spread of disinformation.

Individual countries in Europe have taken stands as well. France has proposed taxes on technology companies, while Germany passed a law against online hate speech.

In India, the government last year imposed rules against the e-commerce operations of companies including Amazon and Walmart. The country is also weighing regulations to block certain internet content posted on social media deemed libelous, an invasion of privacy, hateful or deceptive.

The tech industry has thrived over the past two decades thanks in part to little government regulation. The companies say that it has allowed them to develop products that benefit consumers, like free internet services and online shopping.

The panel said that this hands-off approach had benefits for consumers, but that it had also created consequences related to privacy and lack of competition.

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Senator Elizabeth Warren has called for breaking up the largest tech companies.CreditGabriela Bhaskar for The New York Times

Critics have argued that existing competition laws cannot keep up with the fast pace and rapid growth of the tech industry. By the time authorities issue a verdict, the underlying technology has changed and companies have moved on with even greater power.

Last year, the European Commission issued a record fine against Google of 4.34 billion euros, or about $4.89 billion, for antitrust violations related to its Android mobile operating system. But the case took more than three years to conclude, and is still being appealed.

Over the last 10 years, the report said, the five largest tech companies have made more than 400 acquisitions globally. None have been blocked, and only a small number have had conditions attached for approval.

“Competition policy will need to be updated to address the novel challenges posed by the digital economy,” the report said.

Mr. Furman’s panel called for the creation of a “digital markets unit” that would require companies to allow consumers to move data from one service to another. Large companies would also have to make data available to competitors, a bid to lower barriers to entry by forcing them to share information. The report also calls for a code of conduct to be drafted for the biggest tech companies that would be enforceable with fines.

The recommendations are part of a broader review of tech industry policies as the country prepares to exit the European Union. British officials are also considering taxes on tech companies and making internet companies liable for the spread of misinformation, hate speech and terrorist content on their platforms.

Any regulations would still need to be agreed to by Parliament.

In the United States, Ms. Warren’s regulatory plan would force tech giants to reverse some acquisitions, including Facebook’s purchase of WhatsApp and Instagram, Amazon’s deal for Whole Foods and Google’s purchase of the mapping company Waze. Companies also would be prevented from transferring or sharing people’s data with third parties.

Mr. Furman, the Harvard economist and former Obama adviser, said breaking up the companies was not yet necessary. But he voiced some regret that the White House did not do more to regulate the tech industry while he was there.

“I wish we had gotten to some of the competition issues sooner,” he said.

A common argument against competition regulation is that new companies will emerge as technologies change, just as Google and Facebook overtook older technology.

The British report said that rationale no longer applied because the barriers of entry for young companies were much higher. The largest companies, including Google, Facebook, Amazon and Microsoft, are leaders in the most promising emerging technologies, like artificial intelligence.

“The companies most able to take advantage of it may well be the existing large companies because of the importance of data for the successful use of these tools,” the report said.

A version of this article appears in print on , Section B, Page 1 of the New York edition with the headline: British Panel Urges Action To Regulate Tech Giants. Order Reprints | Today’s Paper | Subscribe